Xbox 360, not Apple TV, is the Real King of the Living Room

Back in April, I noted that Roku had sold 5 million of its living room set-top box devices over its five years in the market. This week, Apple CEO Tim Cook revealed that his company has sold 13 million Apple TVs since its launch in 2007 and almost half those, or 6 million units, came in 2012 alone. That’s a big surge. But Xbox 360 is still number one in the living room.

That said, when it comes to purely entertainment-based living room devices, Apple TV could very well be the most popular.

Here’s how I figure this.

Roku previously announced it had sold 5 million devices, or about 1 million per year on average.

Apple this past week said that it had sold 13 million devices, or a bit less than 2.2 million per year on average. It sold 6 million last year.

Microsoft has sold over 77 million Xbox 360s since its launch in late 2005. That’s a bit over 7.5 million units per year on average. It’s hard to know exactly how many were sold in 2012—if you know of a figure for this, do let me know—but based on Wikipedia figures, the sales numbers for Xbox 360 have been a bit under 1 million per month on average for over two years. So it’s possible that about 10 million were sold in 2012.

The thing is, a large portion of Xbox 360 sales are to gamers, whereas about 0 percent of Apple TV (and even Roku, which has a minor gaming platform of sorts). Considering that Microsoft says that a bit more than half of all Xbox 360 usage is entertainment based, and comparing that to devices that focus exclusively on non-gaming entertainment (electronically delivered TV shows and movies mostly), Apple TV emerges as the presumed winner.

Microsoft’s recently announced Xbox 360 replacement, the Xbox One, has been criticized by gamers, in fact, for being too entertainment focused. But those critics aren’t seeing the big picture. While the living room hasn’t proven to be a huge market so far, that’s expected to change. And Microsoft doesn't just want to retain its lead. It wants to extend that lead and grow the market.

Discuss this Article 24

I don't understand why any Gamer would object to anything that has been put out there so far on the One. Gamer's need to realize that expanding the user base of Xbox only benefits them in the long run.

I've been "gaming" for 30+ years on PC's and consoles (primarily Xbox). I'll be buying the Xbox One the first day it is out to replace my living room 360. It will serve as a entertainment device far more than a gaming machine. I tried the Windows HomeServer products over the past decade and they were just too cumbersome for the family to use. The Xbox interface has solved that problem and I look at One as the next step in that evolution. Family can use it for Netflix, Hulu, whatever . . . and load up a game. Win/Win imho.

I don't see how Windows Home Server (WHS) is relevant in this discussion about Xbox. Maybe you meant something else?

We have Xbox 360 and it's turned on once a week or less, mostly for Kinect games (Fruit Ninja). Most of the time our TV is streaming Netflix, YouTube, etc. from a little Windows 8 Shuttle PC (i5 + SSD), which is smaller than Xbox 360, is practically silent, quick, and easy to navigate with an RF-remote (Lenovo) -- it beats Xbox's clunky and slow interface by a large margin, and it comes on in 2 seconds after sleep. Metro apps look great on a large TV!

Aside the new-generation of games (such as Call of Duty) on Xbox One, nothing else appeals to me (I don't care about live TV or entertainment, which is served better by Windows 8).

You, sir, are in the minority. I bet you or someone built that Shuttle PC for you, right? And even if you could buy it in the stores how many people even think about hooking up a PC in their family room? And then you have the hurdle of getting it to work with a remote, assuming it didn't come with one. Your solution is probably a good one but no one is marketing a Windows PC to be the living room entertainment solution. Hence, it's never going to be the norm. And at the end of the day there's nothing easier than buying a game for Xbox One (or any console) and having the assurance that it's going to work just fine. You can't say the same for PC gaming. Leave PC gaming to the hardcore gamers with extra time on their hands. I use to be one, messing with configs and tweaking my PC to get every ounce of power out of it. Now I don't even have time to play games on the toilet.

The fact of the matter is back in 2005 there was no media streaming boxes like the roku, Google TV, apple TV, etc....I just don't see how a regular consumer could walk into a storeand drop 500 dollars on a media device when you can get any other device for 400 dollars cheaper and it can in some cases has a lot more media capabilities. I think there is a strong possibility that Sony and Microsoft will have their sales hurt because now the market is saturated with chwpa media devices and people are starting to game more and more on the tablet or phone or even cheaper gaming decides such as ouya.

Will hardcore gamers buy these? Of course but as numbers have shown its a niche market and now take out the once in a while gamers its even smaller. Paul you said it yourself more than half Xbox 360 owners use it strictly for media. These cheaper media streaming devices as I see it are going to kill the gaming console not just tablets and phones. Too expensive for a casual gamer that would be fine for a cheaperalternative

Nope I meant WHS. I used WHS to stream our extensive family dvd collection to my living room HTPC before on-line video services became reliable. Now my grandkids can turn on the TV and Xbox on and watch their kid shows.

Except the expanded user base isn't interested in a $500 set top box PLUS $60/year (although it's usually discounted) just to access Netflix, Hulu, MLB, etc. It's a big jump from the $249-$299 XBox 360 to a $500 XBox One especially when you will still have to keep the XBox 360 for all the games you may still be playing on the 360. They'll get the hard core gamers for the first few months after release, then What?

What's "king" in the living room, of course, is the TV and internal tuner--sans the xbox or Apple TV or anything else--unless it is the set-top box your local pay-TV company has given you along with a remote. The "stand-alone" TV with a lone cable set-top box probably outnumbers these other devices combined maybe 100 to 1.

I'm not sure that people are thinking through the act of sitting in front of the boob tube and yelling at the xb1 and/or waving their hands like semaphore on an aircraft carrier just to change the channel...;) I'd bet that all most people are thinking right now is..."Man that sure looked great on stage!" When it comes time to pay the piper and people begin thinking about having to do that in their living rooms--constantly--well, I think opinions will change.

I also think about the people who will discover belatedly that they need to move the living room furniture around because putting the xb1 where they want it interferes with line of sight for the Kinect--so stuff will have to get moved around to provide the necessary visual clearances...;)

At any rate I suspect that the lone TV/Tuner & local set-top box will continue to dominate the living room for sometime to come. People generally dislike added complexity when they sit down in their living rooms to relax and catch a movie. Or so I've been told.

I use an Xbox 360 primarily as a media box (And a gaming system when the grandkids visit.). I think more such users will be attracted to the Xbox One if the device can truly be the "One" solution for TV, DVR, streaming, gaming, video, music, photos, etc.

Xbox One is primarily for hardcore gamers, and secondarily for media.
Its hardware makes it a very poor choice as a media device: expensive, large, noisy, power consuming.
It's not possible to cater to hardcore gamers, who want graphics power above everything, and other living room occupants at the same time.

I think you watched a different reveal event to me, as in the one I saw MS were pushing TV, TV, TV, and... sports.

The hardware in the Xbox One tells an interesting story. It's cheap hardware, comprised of off the shelf laptop parts from ATI, paired with some standard DDR3 RAM. It's certainly large, huge even, but that's mostly due to it using a full size BD drive and having a gigantic, slow moving fan. (so it should be fairly quiet at least). Plus you have HDMI and IR blasters to attempt to control those delightful cable PVRs which look like they belong in the 1980s. (as does, interestingly enough, the very VCR like Xbox One)

MS will presumably throw a few scraps to the hardcore at E3, but mandating kinect will mean we also see a lot of casual games and fitness applications.

Meanwhile in Sony land, they have a machine with similar cheap laptop parts, but clocked much higher, with far more GPU CUs (compute units) giving it 50% more GPU speed than the One, and crucially it has GDDR5 RAM. Rumour has it the OS also has a far smaller footprint, leaving more for devs.

Sony are making a hardcore game console on the cheap. Microsoft are making budget machine for casual gamers, fitness fans, people who like watching TV, and also hardcore gamers who aren't so interested in 1080/60.

The One does not use "off the shelf laptop parts". It has a custom made gpu/cpu that MS paid big bucks for. Gaming performance comparisons at this are all speculative. Myself, as a "lifelong gamer", I am looking forward to the added features on the One as well as gaming. And re Kinect, mandating it was the right move. It will be much more useful than the eyetoy.

Perhaps it's a cultural thing, but amongst the people I know nobody would even begin to consider having a games console in the living room. The adults don't want the children playing games and stopping them watching television, and the children don't the adults monitoring what they're doing while playing games. Therefore games consoles are always in children's bedrooms.

On the contrary, I think a lot of parents want to control what/how much their kids are doing with technology. A universal constant, absolutely, but I think there's more than one school of thought on it.

When I was growing up, I never had it in my room until I was in high school (and I was frequently grounded from it, because of not getting stuff done for school).

My boss, on the other hand, has two kids. Their Xbox is in the living room where he can supervise his kids' activities on it, and they have set times of day that are TV-time not game time. Plus, he and his wife DVR shows that aren't kid-appropriate.

So cultural, not so much, but parental style certainly, and I don't think either approach is necessarily wrong.

So that said, Xbox One helps both styles... at least conceptually. Parental Control options can allow the parents to limit hours for all media types now and not just some things.

Good points and article but I think you missed something. Netflix is still the most widely used digital media service. and according to Netflix the PS3 is the most used device. So umm doesn't that make the PS3 the real King? I really love your articles Paul but your MS Bias is showing in this one.
As far as hardware for gaming the PS4 has already won with more GPU power and more memory bandwidth, the XBox One looks to pull ahead in media tho. The over head of a Live subscription tho will still put them sub par IMO however. Sony's software tho is usually sub par also, so on an ease of use and GUI "looks" I'm sure MS will pull ahead they always do.

For Netflix, specifically, people have the option of network connected TVs, computer, PS3, Xbox, and many other options. It is entirely plausible that THEIR usage based is PS3-dominant, but it doesn't automatically equate king of the living room unless we have actual numbers to work with on all sides. I have both an Xbox and PS3, for example, and I literally only use the PS3 for Bluray at this point, and the Final Fantasy games that I still enjoy.

I use my Xbox for Amazon, Netflix, Xbox Video, and games. I still use all of these combinations less than watching my cable TV service. However, literally the only option holding me back from dumping cable is the lack of Amazon or Xbox Video from offering a subscription option. Netflix doesn't always have the shows I want to watch, and they NEVER have them until well AFTER the season is over. At least Amazon and Xbox have them the next day (which is good enough for me since I'm a heavy DVR user anyway).

So at the end of the day, yeah, I see what Microsoft is going after here... one box for gaming, TV, and video services would be awesome. Eliminating the PS3 and cable box from my TV setup would benefit me greatly.

I'm not clear on what makes Apple TV so popular other than the usual Apple crazies buying whatever Apple pushes. I'm completely ignorant on the setup/pricing it offers, though, so I don't know if it's all that useful or not.

What I don't see, however, is a lot of gamers truly criticizing MS for having a box capable of doing more. What I see is gamers criticizing for not highlighting more gaming improvements and exclusives along with some claim that MS is somehow Indie unfriendly with One... a claim that I don't think is proven yet and more of a fear with the new DRM mechanisms and store availability. What I see happening is those fears will be alleviated as we get more information closer to launch.

Anybody, however, that says, "No, I'd rather have separate boxes in my TV cabinet for each thing I want to do," is either an idiot or just grasping at straws to justify their current preference not having what Xbox One has. Last I checked, I can never have more than one input source active on any TV I've ever owned, so one box doing multiple things is brilliant any way you look at it.

They do. However, the Apple TV offers the iTunes store, which none of the others (obviously) do. Between Netflix, Hulu and ITunes, I have more media than I can watch.

I also completely agree with other comments that the -last- thing I want in my living room is a gaming console. The kids have an Xbox 360 upstairs and they are welcome to it. For TV, I think Apple TV or Roku wins in the living room.

Eventually, someone will crack the bundling scams that Cox, Comcast and Verizon use to charge us all way too much. When a la carte programming really arrives, things like Apple TV and Roku will take over the living room. At $499, Xbox one won't even be a player.

The Xbox One looks to me to be a device chasing a market which is rapidly changing, and yet doing so with expensive, incredibly bulky, dated hardware.

Microsoft love to tell us how most people use their Xbox 360s for streaming more than gaming. Fine, - for a good while using an X360 was the easiest way to get Netflix et all onto your TV. Now 'smart TVs' are common place, and if you lack such a a device, cheap little add-ons like Roku fill that gap. (at least in the US, the situation is very different in Europe where Roku was still born, and ATV has virtually no content outside of iTunes)

So where does that leave the Xbox One? Nobody will buy the One primarily for streaming due to it's cost and enormous bulk, the much touted Live TV support requires not only a cable/sat box, but also an HDMI pass through and IR blaster, and so I would argue, renders it dead on arrival. That leaves gaming then, which Microsoft seem to have not a whole lot of interest in, unlike Sony, who have considerably more powerful hardware than the Xbox One in the form of the PS4. Plus Sony will apparently have lots of nice little indie games on offer, unlike Microsoft.

Add to all that, forcing kinect upon everyone is the very definition of cutting off one's nose to spite one's face. Who wants kinect, except Microsoft? Who wants to be bribed with achievements and gamerscore because kinect was able to watch you not skipping ads? (that's an actual Microsoft patent)

Having played who knows how many hundreds of hours of Xbox 1 and then Xbox 360 games it pains me to see MS dropping the ball so badly, but with the Xbox One I feel they have.

My prediction - PS4 wins the next generation. Xbox One trails badly, and the Wii U is discontinued within 2 years.

How has MS proven they have little interest in gaming compared to Sony?

It shocks me that some people are ignorant to reality. E3 is about a week away. MS made it clear that E3 will be all about gaming and laying out indie plans, etc. MS already mentioned to important points for gamers:

1. 15 exclusive titles within the first year
2. $1 Billion being spent on core gaming content

That tells us that MS is in fact serious about gaming. We can argue whether MS follows through on all of this after E3.

Bundling Kinect does nothing to harm core gaming, nor does it interfere with you if you don't want to use it. MS mentioned it a few days ago that even if Kinect is connected to the console, you'll have controls via the Xbox to disable it. So yes, you can avoid it if you want.

There is a lot of misinformation floating around and I hope we get the real answers from E3 and BUILD

Certainly what little we've seen of both actually running games, there is no big differences that scream out.

Also, sounds like both are going to cost roughly in the same ballpark, ~ $300 to $400.

So, when a consumer sees the two consoles next to each other, what would possibly drive them to the PS4? The XB1 has a far better eco system, Kinect, TV integration, the list goes on and on. What one area are we sure at this point does the PS4 beat the XBox One? Looks?

I agree, that it definitely sounds like MS has dropped the ball with indie developers, but I find it very hard to think that this will sway much of anyone to the PS4.

The PS4 has around 50% more GPU power, and much quicker RAM, plus the OS has a smaller footprint.

It's the biggest gap in performance we've seen in a generation of hardware since the SFC/SNES vs Mega Drive/Genesis.

As for which will consumers buy, well it will come down to games for the most part, as both boxes will offer every streaming service people would want. I personally don't believe the live TV is worth anything, as it's requires a cable box with junky IR blaster.

We'll see multi-platform games looking and running better on PS4 (for that not to be the case would require either bad coding, or just wasting cycles on the PS4), and then the battle of the exclusives and indie titles. Sony has far more 1st party dev than Microsoft at present, and they seem to be trying hard to get indies on board too.

Unless Sony messes something up (such as over-pricing the machine), there's no logical reason why they shouldn't win the next generation battle.

MS hasnt dropped the ball and in fact developers were part of the development of XB1. A few blowhard indie devs (jonathan blow to be exact) were out screaming their anti MS vitriol but in reality when the two biggest publishers in the world (EA and ACTIVISION) show up to your device reveal and not your competitors, there is a reason. PS4 will Japan and the boxes will probably split Europe, but in the USPS4 will not win. XB1 has too much going for it and I'm almost sure that it will have more development presence than 360 by a large margin.

Games like the Last of US which get critically acclaimed wont push units, CoD, Madden and HALO do. You got it all wrong.

I own a 360, Apple TV2 and Wii. The Wii is in the living room so the kids can play games. The 360 and Apple TV are in my "man cave"(a corner of our room above the garage). The Wii is our primary Netflix box for now and the 360 is for games only. Apple TV rarely gets used. The TV in my bedroom has multiple streaming services built in. There is the future, no extra box to buy but TV's with all the services built in. No need for a $500 box to talk to or wave at to watch TV. Which you still needs remotes for to change the volume anyway. Also every time I crank up the 360 to play there are 10-15 friends online as well. One of those might be watching Netflix, the rest are gaming. The 360 may be "king" of the current generation of game consoles but it is not "king" of the living room. Cable/DirecTV boxes and DVR's rule the roost there and yes streaming media is gaining ground constantly but conventional media is still the primary consumption route for broadcast TV. Perhaps the Xbox ONE is being postured so that is prepared for the landscape to change to a streaming media future. But most people I know aren't going to pay $500 for a machine to perform that function is they aren't also interested in it as a game console. They will go for a less expensive, smaller, quieter option such as a Roku3 or a smart TV with those functions built in.
And can we please stop assuming that just because Microsoft(or any company and their devices) has sold 77 million Xbox 360's that anything even approaching that are still working and in living rooms? Between the Red Ring of Death, trade ins at Gamestop, and people just plain stop using them(yes this does happen!) I'd be willing to bet that less than 2/3 of that number are working and in active use.
I'm looking forward to buy an Xbox ONE, in the fall or Christmas season of 2014 when the price comes down and the game library is beefed up.